Mizuho upgrades FMC Corp amid its low valuation and easing headwinds

Published 25/04/2025, 16:40
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Investing.com -- Mizuho Securities upgraded agricultural sciences company FMC Corp (NYSE:FMC) to Outperform from Neutral, arguing that significant challenges are already reflected in the stock’s low valuation.

The brokerage also raised its price target on FMC shares to $49 from $46.

Mizuho (NYSE:MFG) acknowledged that FMC’s earnings and stock price had fallen sharply, driven by a major inventory correction in the crop protection chemical market that began in late 2023.

This downturn pushed FMC’s valuation near its lowest levels since 2017.

“At the current valuation, we believe downside is limited and see risk/reward as attractive,” analyst at Mizuho said.

However, Mizuho analysts believe these challenges are now "well-known and mostly priced in" to the stock.

They stated that the worst of the inventory reduction issues appears to be ending in key markets like North America and Europe, with other regions expected to follow.

Mizuho suggests investor focus should, and likely will, shift towards FMC’s future growth opportunities, especially those driven by new product introductions.

The bank forecasts FMC’s earnings growth will resume as market volumes normalize and new products gain traction.

“While it could be difficult to look beyond the near-term, where confidence is low given the recent track record, we believe the focus should and will soon shift to the medium- and longer-term opportunities, driven by new products, that will deliver value,” analysts at Mizuho said.

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